How We Plan To Raise $1.4bn To Fund Nigeria’s First Ammonia Plant In Akwa Ibom- NSIA

The Nigerian Sovereign Investment Authority has said that there is no cause for alarm on how it will raise the $1.4bn needed to fund the country’s first ammonia and diammonium phosphate plant in Akwa Ibom State.

The statement follows optimism that both the debt and equity markets are awashed with liquidity both locally and internationally.

The Chief Executive Officer of the NSIA, Uche Orji, said this during a program on Bloomberg titled, ‘Future Investment Plans for Nigeria’s Sovereign Wealth Fund.’

The NSIA had sealed a $1.4bn deal with the OCP of Morocco as well as the Akwa Ibom State government to develop a plant where ammonia and diammonium phosphate will be produced.

Partners in the deal include the Nigerian National Petroleum Corporation, Nigerian Content Development & Monitoring Board, Gas Aggregation Company Nigeria Limited, and Fertilizer Producers & Suppliers Association of Nigeria.

The MoU comes under NSIA Gas Industrialization Strategy and would drive implementation of the Multipurpose Industrial Platform project.

The project is structured to commercialise Nigeria’s huge natural gas resources and meet Morocco’s demand for cost-competitive ammonia.

But $1.4bn would be invested in building out the plant and its supporting infrastructure with a target operations-commencement date of 2025.

The NISA boss told Bloomberg Tv that raising the fund for the project would be easy in view of the current liquidity level at both the domestic and the international debt markets.

Orji noted that the NSIA has had planned to raise $400m from equity and $1bn from debt instruments.

But he said the NSIA had to rethink the plan as it now has over $500m interest from equity interests.

According to Orji, the authority will now raise only $900m from the debt on the overwhelming equity interests seen by the authority.

He said, “It could be $900m, it could be a billion and that is simply because the equity portion of the fund is seeing more interest now than we had planned.

“So there is a lot of people asking to have the opportunity to invest equity. The original structure was for us to have about $400m of equity and a billion dollars of debt.

“But at the moment we have over $500m of equity interest. We might just for efficiency purposes restrict it to that and $900m dollars of debt.

“Now where are we going to raise that? It is very simple. There is a lot of liquidity in the market at the moment. We are having to make a choice as to who will be the underwriter. And if you step back and look at the transaction itself, you have a 100 per cent off take guaranteed and so it is easy to fund projects like that.

“I think we are feeling very confident that somewhere at the international market and local market we will be able to raise the debt.”

The NSIA boss revealed that so far, there has not been agreement yet on the stake of the state owned petroleum corporation in the partnership.

He said, “it hasn’t been agreed. At the moment, the partners are the OCP and the Nigerian Sovereign Investment Authority and NNPC is indicating interest in local content.

“I have as at yesterday (March 16, 2020) received interest from four other private sector entities including development financing institutions. So we are yet to decide what the final script will be.

“But I think at the moment the original partners are NSIA 50 per cent OCP 50 per cent at the development stage and will admit other equity partner soon which will include the NNPC, but the right portions haven’t been agreed between the parties.”